Is SSTK Stock A Buy or Sell?

In this article we will take a look at whether hedge funds think Shutterstock Inc (NYSE:SSTK) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is SSTK stock a buy? Investors who are in the know were taking a bullish view. The number of bullish hedge fund positions rose by 4 recently. Shutterstock Inc (NYSE:SSTK) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SSTK isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 19 hedge funds in our database with SSTK holdings at the end of September.

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Minhua Zhang of Weld Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s view the latest hedge fund action regarding Shutterstock Inc (NYSE:SSTK).

Do Hedge Funds Think SSTK Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in SSTK over the last 22 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Shutterstock Inc (NYSE:SSTK), which was worth $95.5 million at the end of the fourth quarter. On the second spot was D E Shaw which amassed $25 million worth of shares. Kent Lake Capital, Millennium Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Kent Lake Capital allocated the biggest weight to Shutterstock Inc (NYSE:SSTK), around 7.29% of its 13F portfolio. Potrero Capital Research is also relatively very bullish on the stock, earmarking 0.83 percent of its 13F equity portfolio to SSTK.

As industrywide interest jumped, specific money managers have been driving this bullishness. Kent Lake Capital, managed by Benjamin Natter, established the most outsized position in Shutterstock Inc (NYSE:SSTK). Kent Lake Capital had $15.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $9.2 million investment in the stock during the quarter. The other funds with brand new SSTK positions are Donald Sussman’s Paloma Partners, Mika Toikka’s AlphaCrest Capital Management, and Minhua Zhang’s Weld Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Shutterstock Inc (NYSE:SSTK) but similarly valued. These stocks are Moelis & Company (NYSE:MC), Atlantic Union Bankshares Corporation (NASDAQ:AUB), Azul S.A. (NYSE:AZUL), American National Group Inc. (NASDAQ:ANAT), Liberty Latin America Ltd. (NASDAQ:LILA), First Interstate Bancsystem Inc (NASDAQ:FIBK), and Liberty Latin America Ltd. (NASDAQ:LILAK). This group of stocks’ market caps are closest to SSTK’s market cap.

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As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $185 million in SSTK’s case. Liberty Latin America Ltd. (NASDAQ:LILAK) is the most popular stock in this table. On the other hand Atlantic Union Bankshares Corporation (NASDAQ:AUB) is the least popular one with only 8 bullish hedge fund positions. Shutterstock Inc (NYSE:SSTK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SSTK is 73.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on SSTK as the stock returned 37.7% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.